This is a partial transcript from "The O'Reilly Factor," August 30, 2005, that has been edited for clarity.
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JOHN KASICH, GUEST HOST: This is a FOX News alert. Ladies and gentlemen, we're looking at new video, brand-new video of looting in New Orleans.
You might remember at the top of the show I asked Jeff Goldblatt the question about looting in New Orleans. And he said that he thought that some people were in need. And that's what he had heard most of this was about.
Probably true, there are some people that were looting because they need it, but I'll bet there were also — and we can see here some people that just saw an opportunity to take advantage.
It's — you know, it can bring out the best and the worst of people. We'll just have to see.
In the impact segment tonight, Hurricane Katrina (search) continues to force the shutdown of the oil production in the Gulf. "The Factor" reported last night that this will likely drive the cost of gas at the pumps to all new highs, but will the damaging hit on the energy market pack a punch against our entire economy?
With us now is David Andelman. He's the executive editor at Forbes.com. All right. Where's gas prices going to go and why?
DAVID ANDELMAN, EXECUTIVE EDITOR, FORBES.COM: Just today, John, gas in the wholesale market in New York rose 40 cents a gallon in one day. I'm predicting that by the end of the Labor Day weekend, we could be up 15 to 20 cents a gallon at the pump all over this country. It's very — it's very bad. We have no — we have no leeway in refining capacity in this country right now.
KASICH: Is there a case of gouging here, rip-offs?
ANDELMAN: Well, there could be some, I suppose, particularly if we get real shortages. But that's not really gouging. What we're looking at is a major shortage in refining capacity. When you take out a million gallons a day of refining capacity in the Gulf area, which is what we're looking at right now for the foreseeable future, this could be very bad.
KASICH: All right. They talk about the strategic petroleum reserve. If Bush let the oil out of there, your view, would it have an impact?
ANDELMAN: Not really. Because it's refining capacity. This is crude oil we're talking about in the strategic reserve. There's no place to refine it.
KASICH: So because we've lost eight to 10 percent, I guess it's eight percent of refining capacity, that's what causes this bottleneck?
ANDELMAN: Exactly. And it's a huge bottleneck.
KASICH: Now what about the larger impact just on gasoline? Because this is a major port, right? We take stuff in. We import. We export things. And now this port is out of commission.
ANDELMAN: This is the largest port in the United States. And particularly 2/3 of all American agricultural products in this country moves through that port.
Just as an example, there's 1.6 million bags of raw coffee beans sitting in New Orleans storehouses right now. Nobody has any idea what condition those coffee beans are. They get wet, they get soaked, they're ruined, and coffee prices will start going up all over the country.
KASICH: David, what about this winter? You know, I mean, we're all talking about, you know, getting close to Labor Day. What a drive — you know, there will be a lot of driving. Prices are going to be up.
Then this winter, there are going to be people, you know, heating oil, heating your home. Any — I've got to think energy prices are going to really be high this winter.
ANDELMAN: They are. There's no question about that. I mean, remember, these refineries process not just gasoline. They process all crude products. That is to say asphalt for your roads, right, certainly heating oil for your houses. Every conceivable part of the economy is going to be affected by this.
KASICH: But yet — yet people say the economy is going to continue to grow. I know the market took a big hit today. What's going to be the macro impact on this economy? Are we going to be poorer as a country?
ANDELMAN: Well, we're certainly going to have more inflation. There's no question about that. Then the question is does the fed raise interest rates even more quickly to basically tamp down this inflation? That's the real problem right now that we're facing.
KASICH: Well, a lot of doom and gloom here tonight, unfortunately. Maybe some bright spots, too. Maybe we'll get an understanding that we need more refining capacity. We need to be less dependent. And maybe we've got to spread out to places where we bring things in and send stuff out. Maybe it's a good lesson for us. I want to look at it that way.
David, thank you very much.
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